The idea of a Mansion Tax continues to cause quite a stir around Westminster, but as I have been out across the country campaigning for the county council elections, it is ordinary families who are beginning to express serious unease about what is being proposed. And these people are right to be concerned, because regardless of what the Lib Dem’s (and now Labour, for that matter) might say, a Mansion Tax would be a highly regressive and punitive tax, bearing absolutely no relationship to a household’s ability to pay. It will clobber hard working people with substantial cash liabilities (£20,000+ a year) and punish them for investing in their homes and aspiring to pass something on to their families. Let’s not forget that residents living in a higher Band family home in Liberal Democrat Kingston upon Thames are already paying £3,500 a year in council tax to have their bins emptied and streets cleaned.
The Mansion Tax would also move us in the perilous direction towards wealth taxation. There is absolutely nothing ‘fair’ about introducing an additional property levy that sits on top of existing council tax bills, as well as income tax, stamp duty, inheritance tax on death and (in the case of second homes or buy to let) capital gains tax. Beneath the thin veneer of populist rhetoric, it amounts to quintruple taxation and we should do all we can to expose the policy for what it is.
On a more practical level, a Mansion Tax would be impossible to introduce and even harder to administer. At least two million homes across England would require an intrusive inspection, costing taxpayers around £260 million, and to add insult to injury, residents would face the threat of a £500 fine if they refused to let the valuation officer in! Regardless of what the other Parties say (or don’t say…) there is no way of determining the baseline for the tax without carrying out a full-scale revaluation of properties. I have tried to explain to the Lib Dems that anything less than this would not survive a legal challenge and leaves taxpayers having to foot the bill! Rather than building on the progress we have made since May 2010 in cutting council tax by almost 10 per cent in real terms, a revaluation would undo this work and simply push people from lower bands up to the one above (Band B to C, C to D, D to E and so on), regardless of their ability to pay.
I've been able to reassure people that Conservatives will continue to oppose this divisive policy. It wouldn’t just impact on millionaires and oligarchs; it would actually hit family homes and pensioners who have worked hard to invest in their homes and families. According to Labour’s calculations, every home worth over £415,000 should be caught by this new tax, which means that more than 2 million modest-sized family properties across the country, and almost one-third of homes in London, will be classified as ‘mansions’. We need to resist this politics of envy, and continue focusing on sensible measures that reward aspiration.